Management at drug packaging and delivery system company, Gerresheimer, discussed demand for vials for use in COVID-19 vaccines on a second quarter results conference call with investors on July 13. Gerresheimer has supported mass-vaccination campaigns by scaling up vial manufacturing.
The question of what happens to demand for COVID-19 vaccines and vials once people have received two doses has hung over manufacturers and their suppliers throughout the crisis.
Bernd Metzner, chief financial officer at Gerresheimer, admitted to an early reluctance to add vial manufacturing capacity because of concerns about how the equipment would be used after the crisis abated. However, there is now evidence that some significant level of demand for vials for COVID-19 vaccines will persist long after the first phase of the immunization campaign is over in the West.
“We have actually received ... quite some sizable demand for '23 for COVID vials, which indicates to me that our key customers do not see that the whole thing is over,” Metzner said.
Gerresheimer sold more than 300m units over the first six months of the year, when Metzner said it was “constantly” shipping vials to its COVID-19 vaccine customers. Metzner expects to ship a similar volume of units in the second half of the year.
Gerresheimer is selling the vials for “a reasonable normal price,” Metzner said, having recognized that using the situation to charge more “would not be appreciated by our customers.” With pricing constrained, Metzner framed the benefits of the business to Gerresheimer as being more about the connections it is forging than the money it is making.
“We have different access to the top layers of the customers. In these meetings, we are not only talking COVID vials but also the full portfolio. That has really boosted the things that we anyhow planned within the strategy,” said Metzner.
The connections could benefit the broader Gerresheimer business. Gerresheimer plans to upgrade the capacity it added in response to the pandemic to support the production of high-value products such as ready-to-fill vials as demand for COVID-19 vaccines falls. Metzner said the lines can “easily” be upgraded.